Meta is widely expected to reveal the Quest 3S headset next week during the Meta Connect event. The company aims to introduce a new headset with mixed reality capabilities similar to Quest 3, but at a cheaper price. An apparent leak suggests the headset could be its most affordable yet.

According to Reddit user Vast_Front259, an Amazon ad seen on the Peacock streaming service shows the Quest 3S with 128GB of storage priced at just $300. This comes before the headset has been formally announced, which would mean the ad aired ahead of schedule.

While the ad looks legitimate, the Reddit user in question does not have a strong account history. The video that plays before the price is a previously released ad that only shows the Quest 3 in the video itself. So we remain somewhat skeptical, but nothing about this leak is fundamentally implausible.

If Quest 3S is priced at $300, it would be the most affordable Quest headset yet.

The original Quest headset was launched in 2019 for $400.

And while Quest 2 actually launched at $300, Quest 3S is expected to run on a newer processor and have mixed reality capabilities that are much closer to Quest 3—and it should run upcoming Quest 3 ‘exclusive’ content that Quest 2 cannot. So Meta has never offered a headset with such capabilities and performance at this price.

And let’s not forget about inflation. Quest 2 launched in late 2020 at $300. If Quest 3S is indeed priced at $300 in 2024, that would be just $250 in 2020.

Quest 3 launched in late 2023 for $500. And while it’s clearly Meta’s best Quest headset yet, the price and lack of killer apps for its mixed reality capabilities gave it less traction than it might have had otherwise. As far as we know, Quest 3 still hasn’t outsold the much more affordable Quest 2.

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At $300, Quest 3S could finally hit the price point needed to bring Meta’s mixed reality features to the majority of Quest users—finally giving developers more incentive to build rich mixed reality content.

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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Yeshaya

    "and it should run upcoming Quest 3 ‘exclusive’ content that Quest 3 cannot."
    if that's a typo please fix and I'll delete this comment. Otherwise I'm gonna have words with Mr. Zuckerberg

  • Christian Schildwaechter

    TL;DR: If Qualcomm hadn't started to massively inflate SoC prices, the Quest 3S wouldn't cost USD 350 corrected for inflation, nor USD 300, but USD 225 based on how much the other components dropped in price since 2020.

    The inflation argument is always somewhat strange with electronics, as for decades the price of components like RAM or flash has gone down much quicker than inflation increased costs. We are now only somewhat used to GPUs or high end smartphones rising in price, but that ist mostly due to Nvidia, Apple and Samsung realizing that people will actually buy way more expensive products.

    So there is little incentive to offer cheaper tiers at similar performance as previous generations, when you can instead add some features and sell a device with slightly improved performance at a higher price. In areas where traditional price improvements still work, you still see massive price drops. I recently saw that whoever owns the Nokia brand now is offering new feature phones, still rather capable, for USD 10 or less.

    When rumors said that the Quest 3S would sell at USD 200, I was pretty sure that it couldn't feature an XR2 Gen 2 and would have to stick to the same SoC as Quest 2. With Quest 3S starting at USD 300, the XR2 Gen 2 became an option, but also the reason why this HMD isn't a lot cheaper. Quest 2 was launched in late 2020, very bad timing as CoViD-19 shortages now long in the past drove up the prices. It used the XR2 Gen 1 for which we have no direct price quote, but which was based on the SD8865 (USD 85), and for years Qualcomm's top SoCs had lingered around USD 80.

    This changed with the rename from SD8XX to SD 8 Gen X. While Gen 1 went for about USD 120, they asked USD 160 for Gen 2, USD 200 for Gen 3, with Gen 4 rumored to cost USD 240. Mobile phone manufacturers obviously aren't amused, and we know that at least for Gen 2 Qualcomm adds about 33% on top of their costs as a margin. We again don't know how much the XR2 Gen 2 costs, but if it matches the SD8 Gen 2 it is based on, 53% of the retail price of Quest 3S is just for the SOC, compared to only 28% on Quest 2. Meaning that if all the rest remained the same (which it didn't), all the other components combined must have fallen in price from USD ~215 to USD ~140, so they are now 35% cheaper.

    The price of Quest 3S isn't USD 300 instead of the USD 350 you'd expect from inflation. The price of Quest 3S is USD 300 instead of USD 225 you'd expect from 35% cheaper electronics plus inflation, because of Qualcomm tax they can now take in similar ways to Apple or Nvidia due to lack of competition. There was recent talk about the largest Indian mobile network (of which Meta owns 10%) releasing a cheaper Quest of their own in India. They could do that by sticking to XR2 Gen 1, which alone would bring them close to the USD 200 from some initial Quest 3S rumors.

    • Blaexe

      Just an Important note to add: While the Gen2 is certainly more expensive for Meta than the Gen1 back then it is produced by Samsung, not TSMC like the Qualcomm smartphone SoCs. The exact reason is very likely to save cost since otherwise the Samsung process only has downsides.

    • VR5

      I thought GPU prices rising was due to cryptomining and their prices finally coming down to some degree due to crypto currencies collapsing?

      Anyway, agreed on the inflation points. I have made those myself in the past, electronics have lower/actually negative inflation compared to most other goods. And of course, inflation makes things less affordable, rising wages might compensate if only they could keep up.

      • kool

        Bitcoin is is trading around 60k

        • VR5

          That doesn’t tell me anything without context. For starters, Bitcoin isn’t the only crypto currency. And its value now doesn’t say anything about the collapse in the past I was talking about.

          There was a goldrush for cryptomining and people bought GPUs to mine, driving up prices because GPUs were in high demand. At some point, trust in crypto currency took a dive and GPU prices finally came down. I don’t think there is anything wrong with this summary of the events that occured. Most importantly, crypto is what made GPUs expensive.

      • Tom

        GPUs haven't really been relevant to crypto for at least 2-3 years, since ASICs came onto the market.

        Unfortunately, the AI hype took over shortly after the crypto hype died down, sending GPU prices through the roof again, so gamers continue to suffer ☹️

        • VR5

          I don’t follow these subjects closely but I was considering mentioning AI as the next calamity for gamers and GPU prices but I wasn’t sure if that’s a thing. I guess it is after all.

      • Christian Schildwaechter

        There actually were two steps:

        1) An unexpected crypto boom led to shortages of higher end GPUs used for mining. This drove up retail prices, as stores couldn't get enough GPUs to meet demand, but Nvidia still sold their RTX 30X0 chips and assembled GPUs at the same prices. So they didn't really make more money from an increased MRSP, only from selling everything they could produce. The huge margins went to the retailers and other GPU manufacturers selling RTX cards.

        2) From this Nvidia learned that customers were willing to pay way higher prices, which caused them to set the MRSP for the RTX 40X0 GPUs much higher from the beginning, with no more cards with good cost/value ratio below USD 500, the best selling category in the past. Instead they tried to push consumers towards high end models vastly more expensive than in previous generations. At the same time they massively increased the price GPU manufacturers had to pay them for the chips, making it very hard for those to even compete, causing EVGA to stop making GPUs that made up 80% of their business. Nvidia made sure that this time, the money would end up with them.

        Unfortunately this worked, and even worse, Nvidia wasn't forced to lower prices even after demand for mining GPUs dropped due to Bitcoin being mined on ASICs, and Etherium switching to a model no longer based on compute power. There was a short glimpse of hope, with Nvidia sitting on lots of booked TSMC capacity they no longer needed, and prices getting close to (now much higher) MRSPs, but that quickly vanished with the following AI boom making things even worse. Availability is better, but Nvidia can now sell all the silicon they can produce for several times of what their GPUs sold at during peak crypto as ML accelerators to enterprise datacenter customers, with companies like Oracle or Facebook basically begging Nvidia to take their money. They don't even need to sell gaming GPUs anymore, let alone cheaper ones.

        There were other, similar effects with CoViD-19. Shortages hit everyone, but also taught Sony that people were really desperate to get their hands on a PS5, paying scammer prices. We then got a PSVR2 more expensive than the console itself, long after component shortages had ended, even though it should be cheaper to produce than a Quest 2. And now a PS5 Pro no longer featuring the optical drive for USD 699. Sony had introduced the PS4 Pro at USD 399 in 2016, the same price as the base model three years earlier, and at the same time dropped the price for the PS4 (slim) to USD 299.

        Sony apparently sees no reason to lower the price of the 2020 PS5, and given that we get around 30% GPU performance increase each year, roughly doubling it every three years at the comparable costs, a PS5 Pro four years later with 45% more GPU performance for 40% more money isn't a great deal. The PS4 Pro sold only about 10% of the regular PS4 units, so there is speculation that the high PS5 Pro price is Sony testing how much gamers will be willing to pay for a PS6, with limited financial risk in case of rejection due to the lower Pro sales.

        • VR5

          Yeah well, demand and supply. With demand decreasing as customers nope out the prices will probably slowly come down again but in the case of consoles the prices staying too high for too long is hurting brands like Playstation long term. Because as customers turn to Switch or PC they won’t easily come back as they find they don’t need Playstation actually.

          • Christian Schildwaechter

            The problem is that for demand and supply to balance a market, you need competition the customers could switch to. With Nvidia making way more money from AI, AMD currently no longer trying to counter Nvidia in high performance, and Intel competing through better price/performance in low end/mid range GPUs, a clearly existing demand for fast GPUs for PCVR simply isn't matched by supply, and everybody therefore giving up on VR isn't a desirable outcome.

            With Xbox not matching PS5 Pro and Microsoft long term trying to merge Xbox and PC as Xbox is losing lots of money, there isn't anything to force Sony to lower prices either. Not even a Switch 2 will reach performance levels needed for current AAA console titles at high resolutions. And while PC gamers believe that Windows PCs provide an (even better) alternative to consoles, that's not really true due to way more involved maintenance. They just don't notice it any more due to being used to it.

            Currently a Steam Deck running Linux provides a more console like experience than a Windows PC, with Windows being the main reason against buying one of the more powerful handheld PC with better game compatibility. Microsoft looking for a exit from Xbox by transitioning people to PCs and cloud services will be largely about enabling a more console like Windows experience, hiding all the technical stuff far away from gamers. But that will take years, if it works at all, no threat for Sony anytime soon

          • VR5

            Competition helps the process, bringing prices down faster, but the amount of people that will buy a product at a high price is limited. Meaning lower spec systems will prosper, both in absolute and in relative numbers, even more so in the latter actually.

            Meta seem able to reach low prices even without competition so VR isn’t really the market hit by ballooning prices. It might even benefit from PS5 Pro being a bad christmas gift.

            So the gaming market can still boom, but the high spec systems will suffer.

          • Christian Schildwaechter

            Meta's competition is the Apple/Google iOS/Android duopoly with its iron grip on the mobile market and the power to set rules. Meta lost more ad money to Apple data privacy rules limiting tracking than they lost on XR. Quest prices are low because Meta's only chance to escape is dominating whatever follows smartphones before Apple/Google enter, leveraging their billions of users.

            The ballooning prices are for user acquisition, Meta invested over USD 5000 for every active Quest user. They sell Quests at production costs, accepting billions in losses. If instead they had given all of them away for free, the cost would only be about 10% of Meta's XR investment. The main reason for not doing that or subsidizing Quest even more to get the user numbers they need is that selling below cost would get them in trouble for dumping.

            Consumer VR is less a market and more a pawn in an expensive play by trillion dollar companies for future market dominance. Zuckerberg gets away with this because his shares give him 60% of the vote, so nobody can stop him from giving away HMDs as free as legally possible to one day escape Apple/Google. As always, if something is free, you are the product.

          • VR5

            Just how big the losses are is speculative. Pico (which has gotten less aggressive with pricing) is not that much more expensive so I doubt the losses are that bad. And since it’s not entirely free, Quest very much is a product, more so than an actually free social media account.

            And to me as a consumer it doesn’t matter how much money Meta is losing. I’ll gladly buy Batman next month though, as well as many of the other high profile games we’re getting thanks to Quest.

          • Christian Schildwaechter

            No, Meta publishes financial reports that precisely list their quarterly MRL losses compared to revenue, and the losses are huge. Zuckerberg and Carmack both confirmed they sell HMDs at cost. They also directly stated that they spend USD 10bn per year at MRL, for a total of USD 50bn over five years. And these five years of MRL cost are only a part of what they paid and invested over ten years. They actually started buying related companies before the 2014 Oculus acquisition, and my loss numbers were based on only the USD 50bn spent at MRL, not the est. total of USD 100bn spent to dominate XR. Which isn't even a lot of money compared to how much Facebook/Meta is worth. Very little speculation involved.

            We also know that Pico collected a total of USD 67mn in venture capital before being bought by ByteDance for est. ten times that, and ran the company for several years while releasing several HMDs with what Meta spent in 2022 to run MRL for 2.5 days. It is safe to say that Meta burned way more than anybody else on XR, with the second place going to Apple for according to Tim Cook spending USD ~10bn over a decade on developing AVP in secrecy. Given the USD 22bn the US Army plans to spend on the "IVAS/Integrated Visual Augmented System" project launched with Microsoft and using HoloLens, there is as always a chance that the military with hidden budgets already spent way more on XR than anybody else.

            The costs for and losses from the actually produced HMDs are negligible peanuts in this calculation, simply because so few are sold compared to the billions invested. With around 25mn sold Quest that would cost USD ~7.5bn to produce compared to USD 50-100bn in investments, Meta's losses per HMD/user are actually way lower than Apple's. Of course this means nothing to the users happy to get a Quest for as low as USD 199, with Meta not trying to recoup the USD 5000+ it effectively cost them. It's just important to keep in mind that Meta doesn't do this out of kindness and expects to make back that money one day. So the current state is in no way sustainable, with Meta's pay-to-win strategy messing up whatever consumer VR market there was, pushing out all competition. And as illustrated above, lack of competition usually doesn't end well for the consumers.

          • VR5

            If you sell at cost, that’s neither a profit nor a loss. Obviously they have huge losses but how much of those come from Quest hardware we don’t know.

            And the point of my ballooning prices statement was that consumers/gamers have to pay more for hardware and games. That isn’t happening on Meta Quest. Sony and MS aren’t willing to eat losses on either hardware or software (the latter also wouldn’t make sense for them anyway), so their market is impacted as more and more consumers are noping out. It has affected Xbox massively and is starting to affect PS as well as sales are finally slowing down, compared to last gen at the same point in their lifecycles.

          • Christian Schildwaechter

            TL;DR: Meta isn't selling at actual, total cost, they are selling at production/manufacturing cost, not recouping any development, service, logistics costs etc. Meaning they sell at a loss, only the loss doesn't increase with every single unit sold like it did with e.g. the Playstation 3 sold below production cost.

            If you sell a product for less than the total cost it took you to create it, you generate loss, even if each single sale doesn't increase you loss due to covering at least the production costs. And the real costs to create a product not only include material and production cost, but also all the salaries for the people who developed it or only wiped the floor, all the prototypes you had to build and the offices you had to rent. Because all these things cost money that you eventually have to make back from the product, distributed over all units, adding a little bit on top of the production costs for each single one. If you don't add that, you are selling with a loss.

            All this should be rather obvious if Meta spent USD 50bn at MRL, with MRL selling Quest HMDs worth USD 7.5bn. There are USD 42.5bn missing here. And even if you declare these an investment, this investment still counts as an operational loss until they have made the USD 42.5bn back. More actually, as you also have to include inflation/interest for the time it took to make it back. There is absolutely no doubt that Meta is losing billions each year on XR, and they themselves state that.

            Selling HMDs at production cost is basically an arbitrary price not derived from the actual cost, but from legal concerns, as companies (usually) aren't allowed to sell a product for less than what it took to manufacture it, which is considered illegal anti-competitive behavior, because then it would be impossible for others to compete without losing money themselves. Usually at least 50% margin on top of production cost is considered necessary to generate any profit from consumer electronics. Meta has outsourced the production of Quest to Chinese XR specialist Goertek, so if Goertek charges them USD 300 for producing one Quest, Meta would have to offer it for about USD 450 to break even, as they also have to cover shipping, service, warranties and replacements, retailer margins and of course all the development and operational costs. If they sell it for USD 300 as they currently do, this is legal (oversimplified) as someone else could also get a similar HMD from Goertek for USD 300, so Meta isn't selling it below production cost. They are still generation a loss because the sale doesn't cover all their expenses, but that's fine as long as those expenses are something not directly related to the production like research or rent.

          • VR5

            Yeah but the exact amount they lose per device is not clear from their financial report. And even with the much higher additional losses from general R&D (most having notthing to do with Quest), it doesn’t matter as long as I’m not the person to pay for those expenses. PC GPUs and high spec consoles have ballooning prices and are becoming unattractive for consumers. Quest doesn’t have that problem.
            >legal concerns, as companies (usually) aren’t allowed to sell a product for less than what it took to manufacture it, which is considered illegal anti-competitive behavior, because then it would be impossible for others to compete without losing money themselves.
            I guess that would depend on the market but do you know this to be true for EU and the US? Because consoles have been sold at a loss in the US and Europe in the past so it would surprise me. They make back their losses with accessory and especially software sales. In theory Meta is doing this as well, certainly with Elite Straps and the like. Software is heavily subsidized with referral codes though.

          • Christian Schildwaechter

            TL;DR: Quest 2 sold at USD 40 loss (very imprecise approximation, anti-competitive behavior is illegal everywhere, mixed calculations that compensate losses somewhere else are legal, but Meta doesn't sell enough apps to make up for losses.

            I don't know why the exact amount they lose per device is important, as this is a number almost impossible to get any other way than Meta publishing it, and the never even publish how many they sell, all the financial reports are aggregates. But since you insist:

            We basically deliver our devices at cost or at a slight subsidy, or slightly more than cost in some cases.

            Zuckerberg 2022-07

            The only HMDs Meta was selling at that time were the Quest 2 128GB for USD 299 and the Quest 2 256GB for USD 399. The spot market price for 128GB flash was around USD 20 back then. With one selling with slight subsidy, the other for slightly more than cost, the difference USD 20 and assuming that both "slightly" are the same, you end up with USD 339 production cost for the 128GB version and USD 359 for the 256GB one, ignoring all other costs like logistics, margin and the difference between production and retail cost. With a little extra ignorance we can therefore derive that the 128GB Quest 2 produced for USD 339 and sold at USD 299 generated USD 40 in losses, while the 256GB Quest 2 produced for USD 359 and sold for USD 399 generated USD 40 in profit, with both averaging each other out, leading to the HMDs being on average sold at production cost (dangerously oversimplified approximation with obvious flaws).

            And yes, I am sure that both the EU and the US have laws regarding anti-competitive behavior, and Meta already got into trouble in both jurisdictions because of these. In reality it is a lot more complex, as these laws allow to sell products under production price if this was part of a calculation where other sales generated from the initial loss lead to a profit in the end, like they did with the Playstation 3.

            For example Apple was forced to charge a small amount for an OSX update they wanted to give out for free, because this was considered anti-competitive. They then changed their accounting so that the price of each new Mac sold already included a small amount for OS updates that would only be developed in later years, making giving out free OS upgrades legal again.

            And without wanting to drag this out any further: Meta isn't selling enough apps for Quest to make up for the losses. I did the math once when they announced 1bn in sales from the Quest store, and it boiled down to something like USD 10/year in sales per Quest. A lot of Quest 2 owners are US teens that go for free apps, with around 1/3rd of all Quest users playing the free Gorilla Tag. That may sound strange, but isn't that uncommon. AFAIR the average Steam user has seven titles in his/her library, with the vast majority having only three, two of which are very often Dota 2 and Counter Strike (or TF2?) The lack of app sales is why Meta is trying to get people to subscribe to Quest+, as this would generate a continuous revenue stream, with yearly subscriptions being much cheaper than paying monthly, and the contract designed to lock people in, so the later you unsubscribe, the more you lose.

          • VR5

            >And yes, I am sure that both the EU and the US have laws regarding anti-competitive behavior, and Meta already got into trouble in both jurisdictions because of these. In reality it is a lot more complex, as these laws allow to sell products under production price if this was part of a calculation where other sales generated from the initial loss lead to a profit in the end, like they did with the Playstation 3.
            That is not what you wrote earlier. You wrote that selling at a loss is anti-competitive. I’d like to see a source for this because it is a jump to say that this is anti-competitive.

            You can btw sell at a margin and still not make a profit. If a product doesn’t sell, price is irrelevant. Stores also drop prices for clearance sales which might result in them not making a profit overall. This happens all the time and I can’t think of an example where selling at a loss was ever deemed anti-competitive.

            So please don’t pass your assumption as fact and don’t pretend equation just because it *seems* logical to you. Plausibility is not proof, it just gives you a hint where to look. You still need actual evidence.

            >I don’t know why the exact amount they lose per device is important
            It’s important because you claimed they lose billions on selling Quests at a loss, which seems ridiculous. The data you cite didn’t change that.

          • Christian Schildwaechter

            You ignored the parts of my comment where I already provided examples and explanations for your questions.

            Systematically selling at loss is considered anti-competitive and illegal, but loss isn't necessarily calculated separately for every item sold, instead it can refer to a mix with some sold at loss, some with profit, as long as a) this was part of the calculation beforehand (see the Apple OS update example) and b) the whole bundle still ends up positive (see comment about Meta NOT selling enough apps to make up losses, while Sony does). And of course companies can sell at loss if they have to, for example because they have too much stock taking up space, production suddenly got more expensive, the goods are damaged, having a promotional sale or other reasons.

            What is not allowed is selling at loss as a business strategy against competitors. Apple could demonstrate that even with free OS updates generating loss, the total income from the Mac plus the money losing free updates was positive. But they still had to change their accounting from regarding OS update and Mac hardware sales as separate to considering them a bundle to make this legal, acceptable because Mac and OS are both needed together to work. Similarly Sony could show they were making more money from game sales for each PS3 than they lost on the hardware. And Walmart can show that offering special deals losing them money cause people to buy enough other stuff during the same shopping trip to again make it profitable.

            If Meta could show that they sell enough apps and accessories to make up losses from Quest hardware sales, it would be legal for them to sell Quest even below production costs, because the losses again would be compensated like with Sony, a model others can also implement at least in theory without losing money. But with Meta's average monthly income from app sales only about USD 10 and retention still low, so for many of the Quests sold Meta's montly income drops to zero after a few months, they cannot show that the bundle is profitable. In constrast PS4 users bought on average twice as many games as Quest users, with PS4 games typically much more expensive, regularly going for USD 60. And its retention is way higher, with about half the active Sony consoles in 2024 still now 11 year old PS4, which always sold (at least slightly) above production cost, not including development, as Sony stopped directly subsidizing hardware after PS3. Meta tries to go for the same business modell, they just doesn't get anywhere near the numbers necessary for it to work yet.

            Meta is losing tons of money at MRL, reported for every quarter, and stated multiple times they don't make any money from selling HMDs, not even intend to anytime soon. Carmack noted that this makes it impossible for another coompany to release a competitive entry-level Horizon OS HMD, an option Meta had considered right from the beginning, without said company getting paid parts of the software revenue. It is not my intention to endlessly argue about corporate finance when really no one doubts that Meta is losing billions on XR, just because you ignore what I already wrote, conclude from me not including all the possible exceptions to complex rules that therefore everything else must be wrong, while you without providing any reasoning believe that Meta magically doesn't lose money on Quest headsets despite the published losses and them not making money from hardware. You're basically hung up on a very limited definition of direct loss per sale that you assume is fixed, when in reality reported loss and win depends a lot on accounting, varies depending on legal and tax needs, and gets even more opaque when including investment and deductions.

            And no, I don't need to provide an even more detailed explanation on accounting, calculating loss and how to get usable estimates for companies that don't publish numbers, to make it reasonable for me to state that what I described is very likely close to what is happening. Everything I described is derived from published rules or numbers, and I've posted about this in detail many times before, in case something is missing here. With Meta reporting numbers even to tax authorities only when their accounting gets audited, there is no way for me to provide "actual evidence". My numbers can only be approximations, the description is very much (over-)simplified, and Meta's accounting will be way more complicated. (Tax) accountants and lawyers make a lot of money for good reasons. But corporate finance and accounting rules apply to all companies the same, be it Apple, Sony or Meta, so I'm pretty sure the argument is sound, even if there is a significant margin for error. It's up to you to argue why you believe that Quest isn't a giant money for Meta.

            It's important because you claimed they lose billions on selling Quests at a loss, which seems ridiculous.

            No, I said (several times) that they are selling Quest at production costs, which then leads to an overall loss for each HMD, because to break even they'd have to add margin on top of the production cost to also cover operation costs, development, logistics, services etc. This is about legal stuff, the difference is important, because this is basically a loop-hole in the anti-competitiveness rules, legal as their accounting separates the HMDs sales from research, operation costs, advertising etc. For competitors like HTC this separation is irrelevant, because they of course have to recoup research, development, service etc. via sales, but its technically legal, so the only players in the low cost consumer market are Meta, which pays for many billions lost on XR and a few million Quest users with Facebook and Instagram money, and ByteDance, which pays for less billions lost on XR and much fewer Pico users with TikTok money.

          • VR5

            You wrote:
            >They sell Quests at production costs, accepting billions in losses.
            So yes, you did claim they lose billions on selling Quests at a loss. Which clearly isn’t true, going by the evidence you produced.

            And I’m not pretending that Meta is not selling hardware at a loss, I’m arguing that this is normal, it is called loss leading, which is why I question your claim that this is supposed to be illegal. I gave another example with clearing stock so again, I don’t think it can be generally true that selling at a loss is illegal.

            Since you claim it is illegal to sell at a loss, I asked if you do know this to be true for the EU and US, and to give a source. My expectation would be the actual laws being applied here, which obviously wouldn’t be the same for both markets. You are citing one precedent with Apple, which isn’t quite the same, and you don’t specify when and where (EU or US) they were tried.

            I guess with Apple being successfully tried it is possible that Meta could face the same scenario. But you also show that they would probably be fine because they stay within the supposed laws. What I’m asking of you is a source, which confirms the claims you’re making. Because, even though they might be true, I’m not gonna take your word for it.

          • Arno van Wingerde

            I still wonder where all that money actually goes… why did Meta spend 100 bn when Apple did it in some ways better for 10 bn?
            The 100 bn is 4x the cost of the Apollo space program… even with inflation that is a royal sum of money! Did Pico spend over 1 bn on their program?

          • Christian Schildwaechter

            I'm always perplexed by this too. At one point MRL had 10,000 employees, a lot of them researchers and engineers with high salaries, and they created a lot of prototypes that can be incredibly expensive, esp. for projects like creating Meta's own ARM chips they later cancelled. Nonetheless USD 10bn a year is a huge amount, and it's not trivial to spend that much money, esp. considering that the results were things like Horizon Worlds. What the hell are they doing over there at MRL?

  • ViRGiN

    Perfect time to bump up Valve Index price!
    Adjusted for inflation, Valve Index today should be sold for about $1200.

  • Yeshaya

    "Does most of what the AVP does at 1/7th the price" was a pretty good tagline. "Does most of what the AVP does at 1/11th the price" is even better.
    If they'd make the store/app/interface in general like 20% less terrible they could really take off with this.

    • Christian Schildwaechter

      One of the characteristics of a good headline is that it's also true, otherwise it is only clickbait. And yes, a USD 299 Quest 3S will be a pretty good deal for a gaming VR HMD, even if most games aren't optimized for Quest 3 yet and therefore will look exactly the same as on Quest 2 due to the identical resolution and lenses. But no, a USD 299 Quest 3S does not most of what AVP does. Not even close.

      • VR5

        Not saying Quest 3(S) can do everything AVP can but Quest is more than a gaming HMD, I use it a lot for media consumption which is also AVP's best use. Productivity is bad on both, I'd think, mostly for comfort reasons. But in principle they can do the same things, with AVP being bad for games, both good for media and AVP better but still bad for productivity.

        So basically, AVP is expensive and Quest great for entertainment.

      • Yeshaya

        So I'm a Q3 user and have only tried the AVP in-store demo, but what particular functions do you have in mind that the AVP can do that the Q3 (and therefore Q3s) can't? In my mind the Q3 offers great gaming, ok entertainment, and basic productivity, and the AVP has minimal gaming, great entertainment, and good productivity.
        Like if want to spin up 3 virtual monitors with a web browser, Netflix, and a word processor going side by side synced with a Bluetooth keyboard it'll be smoother and easier with the AVP, but it's doable for the Q3.

  • ViRGiN

    Article about Visor scam when? You were proud to announce they are taking pre orders a year ago RTVR.

  • ViRGiN

    Ben, why are you deleting my comments calling it a S-C-A-M?

  • I hoped for the rumored $199, that would have broken the market. $299 is still good, though.

    • Christian Schildwaechter

      It seemed likely considering Meta sold significant amounts of Quest 2 at USD 249 during the last holiday season, and again after dropping the price to USD 199 a few months ago. They had a three year old HMD outselling their current model by at least 4:1, with MRL's Q4 2023 revenue exceeding that of Q4 2022.

      So price is still a major factor for user acceptance. The enthusiasts will update just because, but for new users somewhat abstract benefits like more performance most games don't utilize, clearer lenses and a slightly smaller form factor obviously weren't worth 100% or even 150% more.

      Given that Quest 2 has sold around 25mn units, it will be the development target for a long time anyway. So a USD 200 Quest 2 refresh with cost reduced design, only adding color passthrough for MR apps, would IMHO have a way better chance to draw in new users than a 50%/USD 100 more expensive Quest 3S mostly adding performance beyond what most games will target for years. But Meta might need the Quest 3 performance for a shift towards more generic XR use beyond gaming, and releasing a USD 199 HMD that plays most of the same games would probably reduce Quest 3 sales even further.

  • kakek

    So what advantage would the quest 3 ( non-S ) keep ?
    – Better lenses
    – Slightly smaller
    – More storage space

    For 250$ more.
    I think idealy, they should also cut the regular quest 3 price by 50$ at least.

    • kuko61

      For me, the biggest benefit of switching to Quest 3 from Quest 2 was the lenses.
      I wouldn't go back to a VR headset with Fresnel lenses.

    • Mateusz Jakubczyk

      The basic version of Quest 3 has the same storage space, 128GB, so the only thing left are better lenses and a smaller form factor for $200 more.

    • Christian Schildwaechter

      TL;DR: not enough to justify the higher price for most users, making Quest 3 an enthusiast model selling in much lower numbers, with developers mostly targeting Quest 2/3S, leading to limited support for some of the Quest 3's added features.

      – Better lenses
      – Slightly smaller
      – More storage space both start at 128GB
      – A depth sensor for increased tracking accuracy and speed that in the future may be used for a much smarter guardian and other features.
      – Slightly higher resolution, 2064*2208 vs 1832*1920 per eye, ~30% more pixels
      – Larger battery capacity, but at the same time higher power consumption due to the very inefficient pancake lenses requiring much brighter displays
      – Better ergonomics due to the center of mass being much closer to the face, for lower inertia during head turns
      – More solid build/feel
      – Wheel for continuous IPD adjustment with the current value shown inside the HMD, instead of three fixed steps as on Quest 2
      – Contacts for charging station
      – Option for very expensive higher storage tier.

      The rest remains to be seen.

      – RAM will probably be the same at 8GB
      – The XR2 Gen 2 in Quest 3S might be clocked lower to get away with a smaller battery, possible as it only has to render a lower resolution
      – Passthrough should be better on Quest 3 due to the depth sensor making correcting the depth in the two flat stereoscopic color camera images easier/faster, but it's not clear whether the sensor is currently even used after the initial room scan. Quest 3 still cannot handle e.g. furniture being moved, something the depths sensor would allow when used constantly.
      – The passthrough cameras on Quest 3S could be lower resolution to reduce computational load, again due to the lack of assistance from the depth sensor.
      – Quest 3S might also fit the charging station
      – Meta might limit some advanced functions like the recently introduced ability to show the video stream from HDMI devices connected via a grabber to Quest 3
      – Some features on Quest 3S might be better simply because of newer components now being available
      – Meta might adjust the Quest 3 prices or increase the included storage

      Will this justify the USD 200 more for the USD 499 Quest 3 entry model compared to a USD 299 Quest 3S? For the vast majority of new Quest buyers, a significant portion of which so far have been US adults giving away a Quest as a Christmas present to a teen, it won't. Quest 2 sales dropped sharply after the price was raised to USD 399, and increased way above Quest 3 at first USD 249 and finally USD 199.

      Quest 3 is positioned as the enthusiasts model, running the same games as Quest 2, some with better graphics, but compared to a Quest 3S mostly adding some non-essential nice-to-have features. Of course some will disagree and consider anything without pancakes unusable, but that rubbish. Quest 1/2 worked fine with Fresnel, and due to how our eyes work, edge-to-edge clarity is less important than most would expect. Price has a much bigger impact, with most of the market clearly preferring the Quest 2 even less capable than Quest 3S over the more advanced Quest 3.

      • Arno van Wingerde

        The way I see it, Quest 2, now likely replaced by Quest 3S is ideal for starters, or upgraders from e.g. Quest1/2 who do not wish to spend the extra money on a Quest 3. For people willing to spend extra on somewhat better graphics, there is the Quest 3. I assume Meta does not sell the Quest2 anymore, after clearing its last stock, as that will only hinder Quest 3(S) adoption, with too many games aiming for Quest 2 and offering limited advantage to Quest 3(S) electronics.

        • Christian Schildwaechter

          Currently upgrading from Quest 2 to 3S isn't really worth it. With the same resolution and lenses, most games will look and feel the same, and even those that actually got updated graphics for Quest 3 won't look as good on 3S. So the main benefit would be color pasthrough.

          For Quest 1 users it might make more sense after Meta recently cut off the Quest 1 from a number of services, also no longer allowing new apps to be published for it. With a number of apps already not supporting Quest 1 anymore, Quest 3S is now the cheapest, somewhat future safe option to get things running again.

          I assume the main reason why Quest 3S even exist instead of Meta continuing to sell Quest 2 is the lacking support for MR by developers, understandable considering that only a minority of the users had the finally usable MR in color that Meta tried to sell as the major new Quest 3 feature. A base model with acceptable color passthrough will grow the MR capable install base, eventually making MR app creation financially viable. And establishing MR is way more important for Meta's XR plans than the base model being able to play Quest 3 exclusive titles.

          • Mateusz Jakubczyk

            And what was the benefit for those who upgraded from Quest 1 to Quest 2? Only better resolution, worse screen, same Fresnel lenses. But the real benefit was the processor, which allowed to run new games on Quest 2, which could not run on Quest 1. It will be the same in this case. Next year support for Quest 2 will end and new games will not be available for it, so switching to Quest 3S will be very profitable.

          • Christian Schildwaechter

            Meta sold around 25mn Quest 2, roughly 550K each months, about 9mn of which are still monthly active, compared to ~1mn montly active Quest 3, selling much slower. If Quest 3S sells at the same speed as Quest 2, it will still take years until more Quest 3S are actively used than Quest 2.

            Developers will target the largest install base, and for years this meant they were targeting Quest 1, as all games running on Quest 1 would also run on Quest 2. And that despite Quest 1 only selling about 1mn units and being completely replaced by Quest 2 after 18 months. Meta finally went ahead and made it impossible to release new games for Quest 1 after March 2024.

            And with Meta now opening Horizon OS to other companies, they won't be able to simply shut down older HMDs. Google still supports PlayServices for Android 5 from 2014, even though the OS itself has been unsupported for years. And there were recent reports that Jio, India's largest mobile network operator, of which Meta owns 10%, plans to release a Jio Quest at a very low price for the Indian market, probably based on an older chipset to reduce cost. So basically a rebranded Quest 2 for a market of 1.4bn people where Meta isn't present yet.

            Next year support for Quest 2 will end and new games will not be available for it

            Most certainly not.

          • Mateusz Jakubczyk

            Even though we know that Quest 2 may have sold 25 million, we don't know anything about its retention, how many users actually use it and how many have abandoned it. Quest 3 supposedly has higher retention than Quest 2, the same may be true for Quest 3S. This means it has a chance to match (or surpass) Quest 2 in terms of active players.

          • Arno van Wingerde

            It would certainly be interesting to see how many games are currently being sold to Quest2: probably a much lower share than the number of Q2 vs Q3 would suggest. However, currently Christian's argument stands.

          • kakek

            Why not ? That would fit with the timescale at which they dropped the Q1.

          • Christian Schildwaechter

            TL;DR: with the same support length as Quest 1 after it reached End Of Life, Quest 2 would get new games until late 2027; cutting off Quest 2 anytime soon would significantly reduce the market size, making game production less profitable/feasible, leading to fewer new games for Quest 3(S) users too, so Meta won't do it

            I assume that with "timescale" you are referring to the time between release 2019-05 and Meta no longer allowing new Quest 1 games after 2024-04, so five years, with Quest 2 reaching five years in 2025-10. But of course support duration isn't a fixed length, it it whatever Meta chooses for a number of reasons.

            The first Quest 2 only game was RE4 in 2021-11. Meta forced developers to still support Quest 1 much longer for games not limited by performance, and ended security updates for it only in 2024-08. And while Meta stopped selling Quest 1 2020-10, 18 months after release, the last Quest 2 were sold in 2024-06, 44 months after release. So if support duration is fixed, but actually relative to when the last customers bought one, Quest 1 got 3.5 years post EOL game support, which would mean Quest 2 gets till 2027-12.

            The main reason why Meta will not drop Quest 2 support next year is that it would be colossally stupid. Quest 2 was a huge jump forward after Quest 1, and incredible cheap for a VR HMD in 2020, triggering a lot of interest, while Quest 3S is mostly a speed bump most current games don't even benefit from. And as the price goes up again to USD 299 from USD 249/199 for a Quest 2 after Fall 2023, we shouldn't expect a sudden huge rush of interest/sales, esp. since the usual first wave of enthusiasts will be missing, as most of them already bought a Quest 3.

            We had several sources showing Quest 2 retention around 40%, with Meta stating that newer users engage a lot less with the platform than the first waves with most of the enthusiasts. The main issues are still high friction and lack of big titles from known franchises drawing in/keeping people interested, and Quest 3S will mostly suffer from the same problems. Quest 3S overall retention might end up being lower, because many of the enthusiasts who's higher/longer engagement drove up the average on Quest 2, will go for Quest 3 instead.

            Given all that, it will take a LONG time for Quest 3(S) to be used by half of the active users, and even longer to push Quest 2 down to 25%. Meta has enough problems attracting larger developers, they simply cannot afford to cut off even only 25% of the potential customers those developers need. By the time Meta actually forbid new Quest 1 games, Quest 2 accounted for roughly 95% of all Quest sold, so the market impact was limited. Cutting off Quest 2 in 2025 while it still makes up the majority of active HMDs would be suicide, esp. with other companies launching XR HMDs.

            The only ones interested in Quest 2 support ending are Quest 3 users assuming that developers still targeting the lower specs Quest 2 leads to simpler/uglier/worse games. Quest 2 users obviously want to keep using it, given that most games will look the same on Quest 3S, and therefore would be really pissed if Meta forced them to upgrade. Developers don't want to lose potential customers. And those wishing for Quest 2 support to be dropped don't realize that due to lost sales, cutting off Quest 2 too soon would actually reduce the number, budgets and scope of new games, including those that offer optimizations and better graphics for Quest 3.

          • Arno van Wingerde

            MR is one reason, the existence of a larger user base that can play more advanced games is another and potentially more important for progress in the VR world. I would like a "Quest console" as an option for playing PCVR games. Deckard, are you there somewhere? The problem is the price point: for instance, a €500 console, say PS5 power would be "not good enough" for some, esp. simmers, and "too expensive" for others…